As bad as things may have got for Kazakhstan, authorities have tended to grasp the tender slip of consolation that the economy was expected to grow in 2016, if only slightly.
Analysts at the London-based Economist Intelligence Unit now beg to differ and are predicting that Kazakhstan is set for its first year of negative growth in nearly two decades.
“We have revised our forecast for Kazakhstan and now expect GDP to contract for the first time since 1998,” the think tank tweeted on January 22.
An accompanying table showed that the EIU believes the economy will shrink by 2 percent this year, posting negative growth for the first time since 1998.
Years of near double-digit growth were fueled by surging oil prices, and the slump has accordingly been caused by the collapse in the cost of the commodity, which accounts for about one-quarter of Kazakhstan’s economy.
EIU’s prediction, the gloomiest one out there for Kazakhstan, piles on the misery as the country comes to terms with the economy slowing to just 1.5 percent last year, down from 4.3 percent in 2014.
The government is now recalculating its budget, with the most pessimistic scenario based on oil costing just $16 per barrel on average over the year, Prime Minister Karim Masimov said last week. The government’s core scenario is based on $40 oil, well above the sub-$30 per barrel mark registered most of last week.
Kazakhstan is also bearing the brunt of a slowdown in its major trading partners Russia, which is in full-blown recession, and China, which posted its lowest growth in a quarter of a century
Serikhzhan Mambetalin's mother, Anastasia, sobbing after the Almaty court verdict on Friday, January 22, 2016.
Two political activists have been jailed in Kazakhstan on charges of inciting racial hatred at the close of a trial that their supporters believe was politically motivated.
The trial in Almaty ended two days after President Nursultan Nazarbayev called a snap parliamentary election for March 20, a move he said was aimed at consolidating the nation as the country battles an economic crisis.
Yermek Narymbayev – who has been in ill health throughout the trial – received a three-year prison term and Serikzhan Mambetalin was jailed for two years at the end of a six-week trial, to cries of “shame!” from supporters as Mambetalin’s elderly mother was led away from the courtroom in tears.
During the summing up of legal arguments on January 22, Mambetalin denounced the proceedings as “a political order” and Narymbayev dismissed them as “illegal.”
The two were tried on the charge of incitement to ethnic, religious, tribal or social strife, which civil society campaigners recently urged the authorities to abolish, claiming it is used to muzzle critics. The government denies that any politically motivated trials take place in Kazakhstan.
The charges against Narymbayev and Mambetalin stem from their Facebook postings about an unpublished book written some two decades ago by another anti-government activist, Murat Telibekov, who is under investigation on the same charge.
In their postings, the two “incited ethnic strife and insulted the honor and dignity of the Kazakh nation,” a prosecutor claimed – arguments the defendants, known for their mildly nationalist stances promoting ethnic Kazakh interests, dismissed as nonsense.
A man faces a possible jail sentence after a video of him appearing to encourage his two young daughters to knock back shots of vodka went viral in Kazakhstan.
Broadcast by KTK TV on January 20, the video shows the children – who appear to be aged around three and six – drinking large shots of clear liquid dispensed by their father from a vodka bottle, to cries of “a hundred grams, a hundred grams!” and “let’s toast!”
The man, identified only as a 34-year-old resident of Astana, inadvertently drew the attention of the police to the video himself, by filing a complaint about an infringement of his privacy after a friend posted it online.
The clip went viral, sparking widespread condemnation among social media users in Kazakhstan.
The man now claims there was only water in the bottle – but he faces a possible 6 million tenge (around $16,000) fine or a prison term on the charge of encouraging anti-social behavior in a minor.
The video came to light as another case of child abuse shocked the nation, after a woman threw a newborn baby out of a car and allegedly caused its death in southern Kazakhstan earlier this month.
The suspect, Bakhytgul Baysengereyeva, is the adoptive mother of the underage girl who unexpectedly gave birth to the child prematurely in a car traveling along a highway.
She “admitted that she was afraid and threw the baby out onto the road, because she did not know about the girl’s pregnancy,” a police officer explained to Tengri News.
Human rights campaigners in Kazakhstan are calling for the abolition of two pieces of legislation frequently used against critics of President Nursultan Nazarbayev.
The appeal comes against the backdrop of an ongoing trial in Almaty of two activists facing charges of incitement — an accusation that their supporters argue is an attempt to muzzle them through the courts.
“There are two articles in our Criminal Code that can – given the desire – be used against inconvenient dissidents and political opponents,” Yevgeniy Zhovtis, the country’s best-known human rights campaigner, told a press conference in Almaty on January 19. “Both are political.”
Zhovtis was referring to the charge of incitement to social, ethnic, tribal, racial, class or religious strife — a statute routinely wielded against political activists and journalists — and the charge of dissemination of false information, which was criminalized last year.
Continued use of these articles “for the persecution of dissidents” risks “turning our country into a police state moving closer to totalitarianism, which is extremely sad,” said Zhovtis.
Oil production is entering a new year of decline this year in Kazakhstan — a dismal omen for a country so heavily reliant on energy exports.
Energy Minister Vladimir Shkolnik said on January 15 in remarks quoted by the Novosti-Kazakhstan news agency that Kazakhstan expects to pump 77 million tons of oil in 2016, 3.1 percent down on the 79.5 million tons produced last year.
The fall is down to the gradual depletion of the country’s oil fields, most of which have been under development for decades. As the fields dry up, recovering the remaining crude becomes more expensive, and with oil prices now hovering obstinately at $30, drawing Kazakhstan’s deposits is becoming costly.
And this latest government forecast may be too optimistic.
Shkolnik said in September that Kazakhstan would slash its oil output forecast for 2016 to 73 million tons if the oil price hit $30, as it has done this week. He said 77 million tons would be the target if oil stood at $40 per barrel.
The decline has been in train for several years already.
Oil output dropped 1.2 per cent in 2014, to 80.8 million tons, and 1.6 percent last year, to 79.5 million tons.
But it is the disastrously low prices that are taking the toll on the economy. The government announced on January 15 that gross domestic product grew by 1.2 percent last year – a significant slowdown on the previous year’s 4.3 percent.
The government is to meet on January 19 to discuss cuts to this year’s budget in the face of the economic slump.
Kazakhstan’s lower house of parliament called for a snap election on January 13, setting the stage for a vexed vote against the backdrop of chronic economic uncertainty.
The early dissolution of the Mazhilis had been widely predicted as President Nursultan Nazarbayev seeks to refresh the mandate for his ruling Nur Otan party.
“The Mazhilis has fulfilled its historic mission, creating the legislative basis for the implementation of the Plan of the Nation,” Vladislav Kosarev of the pro-government Communist People’s Party of Kazakhstan said in a statement read out in parliament and quoted by Kazinform news agency.
He was referring to a reform agenda unveiled by Nazarbayev last year that is intended to reverse an economic slowdown provoked in large part by the slump in the price for oil.
“Now that a new historic period is getting under way and the large-scale modernization of the country and practical implementation of presidential reforms in all areas are beginning, it is important that parties receive a new mandate of trust from voters,” Kosarev said.
Kosarev said that “broad social consolidation” was required to implement anti-crisis measures, since “only unity and coordinated actions will allow us to withstand fresh economic blows.”
The snap vote must be approved by Nazarbayev, which is expected to be a formality, and is expected in spring. Under the current schedule, the election had been due to take place in early 2017.
Despite talk of a fresh mandate, it is likely the authorities are also motivated by a desire to complete the electoral process ahead of time to head off any discontent provoked by the economic downturn.
Russia says it has completed the handover of air defense systems to Kazakhstan, part of the project of creating a joint air defense system across the former Soviet Union. But Kazakhstan's Ministry of Defense is complaining that the systems aren't actually yet delivered and are not in working condition.
The gift of five Russian S-300 air defense systems to Kazakhstan was announced two years ago (and then was said to be on slate for completion by the end of 2014). This was to be the first step of the Central Asian portion of a joint air defense system Russia is trying to create with its allies in the Collective Security Treaty Organization. (Armenia and Belarus are in their own discussions with Russia to build up the system in their regions.)
At December's meeting of the CSTO in Moscow, Russian Defense Minister Sergey Shoigu announced that the S-300 transfer to Kazakhstan was complete.
"We have completed the project to transfer without charge the S-300 air defense systems to Kazakhstan, taking into consideration the fact that this is a weighty, if not main, contribution to the integrated air defense system, which, one may say, has become a reality, and now its hardware component has been built up to the expected strength," Shoigu said.
But that's not quite the situation, senior Kazakhstani defense officials say. "The S-300 complexes won't enter service tomorrow. Two complexes are underdoing technical service in Kazakhstan, and three will undergo technical service in Russia," the head of Kazakhstan's air defense forces, General-Major Nurlan Ormanbetov, told the Kazakh service of Radio Free Europe/Radio Liberty.
With raids against independent journalists and arrests of government critics becoming routine in Kazakhstan, the battle against dissemination of information is taking on a systematic quality.
On December 18, police once more targeted the Almaty offices of Nakanune.kz, one of a handful of embattled outlets that has come under sustained pressure in the past year.
Radio Free Europe/Radio Liberty’s Kazakhstan service, Radio Azattyk, reported that police closed off the entrance to the office as a search carried on inside.
Nakanune.kz is a website that arose from the ashes of a long-suffering newspaper that went by several names but was best known as Respublika. That newspaper, which still exists in electronic form, was edited by Oksana Makushina, who is now at Nakanune.kz.
Radio Azattyk reported that police also searched the homes of Nakanune.kz owner Guzyal Baidalinova and a journalist with the website, Yulia Kozlova.
Yet another outspoken reporter, Rafael Balgin, phoned an acquaintance early in the morning to inform him that his apartment too was being searched.
Almaty police said in a statement that they have initiated pre-trial investigations against Respublika and Nakanune.kz for allegedly disseminating false information about the activities of Kazkommertsbank, Kazakhstan’s largest lender, and other unnamed parties.
The aim of the investigation is to establish who ordered the smear against the offended parties, police said.
“The published material bore a patently made-on-order quality and contained knowingly false information and provocative statements without concrete factual basis,” the police statement said.
Authorities say that what they are describing as smears were paid for in cash sums.
A Kazakhstan warship tests anti-aircraft artillery in the Caspian Sea. (photo: MoD Kazakhstan)
Kazakhstan has, for the first time, launched an anti-aircraft missile from a warship on the Caspian Sea. While the test may not mean much operationally, in the context of current heightened Russian military activity on the Caspian the move appears to be a modest show of force from Astana.
Kazakhstan's Ministry of Defense announced on December 14 that it had tested the Arbalet-K air-defense missile system from its missile boat Oral. The test was carried out at a "high level," the MoD said, noting that the [Ukrainian-made, incidentally] Arbalet-K was designed to defeat "jet, turboprop and propeller aircraft and helicopters, under conditions of visibility of the target, using surface-to-air missiles."
This follows another test, on November 27, of anti-aircraft artillery from the Oral and three other Kazakh warships on the Caspian. That test, the MoD said, was conducted in "conditions as close as possible to combat."
These weapons are a far cry from the cruise missiles that Russia has launched from the Caspian on three separate occasions since October -- twice at targets in Syria, and once in a test. Russian President Vladimir Putin also has recently dismissed worries by Kazakhstan about the danger posed to civilian aircraft over the Caspian, saying that the Caspian states need to make sacrifices for the sake of the anti-terror fight that Russia is carrying out.
In one of the greatest falls from grace in the post-independence history of Kazakhstan, a court in the industrial city of Karaganda on December 11 sentenced former prime minister Serik Akhmetov to 10 years in jail for corruption.
The severity of the punishment has set tongues wagging about ulterior motives and show trials, especially since corruption is rife and cases of abuse of office have abounded in recent years, but rarely with such severe outcomes.
Akhmetov was arrested on charges of grave corruption on November 18, 2014, less than one month after being removed from his post as defense minister. Rumors immediately began circulating of infighting among Kazakhstan’s notoriously fractious elites.
According to prosecutors, Akhmetov, who was prime minister for 18 months until his resignation in April 2014, took bribes of $2.4 million and embezzled large amounts of a state resources.
Another 20 officials from the Karaganda city and region were also in the dock in the broad-ranging and lengthy trial, which reviewed material contained in 338 volumes of evidence.
Prosecutors had asked for a 12 year sentence. Although the sentence passed was milder, it also included provisions for the confiscation of Akhmetov’s property.
Akhmetov, who had until his arrest been a figure whose work experience suggested unusually close ties to President Nursultan Nazarbayev, appealed in vain for clemency before being convicted.
“I sincerely ask forgiveness of Nursultan Abishevich for failing to live up to his trust. I understand that I bear moral responsibility for the fact that, among other things, such an atmosphere has been created in Karaganda. And that the head of state has been forced to think and worry about these things,” Akhmetov said.